If you should become unable to work due to accident, prolonged sickness or through unemployment such as unforeseen redundancy due to a disability then you would probably find yourself having a real struggle to pay for your essential daily expenses unless you have income protection to safeguard against the loss.
Once you have been diagnosed with a critical illness or disability, then the policy would kick in and you would receive a tax free amount each and every month. For a death claim, the returns would usually be refunded to the beneficiaries nominated by the policyholder (this is allowed in some companies, eg. NTUC INCOME) or in a will. You do however have to ensure that a policy would be suitable for your needs and that if you should have to make a claim, you would be able to do so without any problem.
An life insurance or income protection insurance plan will give you a tax free sum of money each and every month once you have any of these 3 cases: death/ disability/ critical illnesses. It will then continue to cover your lost income up to a set amount for up to retirement age. Payout is immediate on critical illness; partially over 5 years till completion for a disability coverage and immediate to the beneficiaries for death. Usually Permanent Total Disability can be paid over 5 years (1st-4th year 10% payout each and 5th year 60%)
A Life insurance is an invaluable safety net on which you can fall back on should as a breadwinner falls sick and the family needs the money for daily expenses and the breadwinner’s medical expenses. It should be noted that at the time of taking up, one must be health and not suffering from a pre-existing medical condition otherwise there might be a loading increased premium or exclusions.
You should always check the small print for any exclusions along with the key facts regarding an a life insurance policy and you can get these facts from a standalone provider if you are not sure. If you are looking for the best deal, there are 7 ways to look and compare a policy: (1) Premium, (2) Protection Value, (3) Cash Value, (4) Distribution Cost (5) Company Reputation (6) Features (7) Charges / Policy Fees
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